As globalization wanes, diversified conglomerates like CK Hutchison Holdings Ltd. (CK) struggle to prove their worth. The company, controlled by Hong Kong’s richest man, Li Ka-shing, recently agreed to sell most of its ports, including those near the Panama Canal, to a BlackRock-led consortium. The deal, worth $19 billion, was well received by the market—CK’s stock surged 22%, its biggest jump in over 20 years.
Despite the initial optimism, concerns remain. CK’s stock still trades at just 35% of its book value, reflecting investor skepticism over the company’s complex business structure and poor track record in shareholder returns. The conglomerate spans telecom, retail, and infrastructure across multiple regions, making valuation difficult. The number of analysts covering the stock has dropped significantly over the past decade.
While CK now has a massive cash inflow, its plans for the funds remain unclear. Historically, the company has refrained from offering special dividends or buybacks after asset sales, frustrating investors. Analysts speculate the proceeds might be used for infrastructure acquisitions in the UK, where CK has shown interest in companies like Thames Water and Viridor.
At 96, Li faces perhaps his final opportunity to mend ties with shareholders. Rather than pursuing further expansion, CK could return capital to investors through buybacks—often the best move when shares are undervalued. For a man once dubbed “Superman,” a shareholder-friendly approach could be the real superpower CK needs.
(By Ziqi Qin)
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